Stockton metro area housing market improving

Saturday

Dec 8, 2012 at 12:01 AM

The Stockton metropolitan area is one of the 84 metros added for the first time to the Improving Markets Index, which identifies areas that gained in home construction, housing prices and employment from their recessionary lows for at least six consecutive months.

Reed Fujii

The Stockton metropolitan area is one of the 84 metros added for the first time to the Improving Markets Index, which identifies areas that gained in home construction, housing prices and employment from their recessionary lows for at least six consecutive months.

The December index, sponsored by the National Association of Home Builders and First American Title Co., now lists 201 metro areas as improving. That's up from 125 in November, minus eight that dropped from the list.

Counting more than half of the 361 U.S. metropolitan areas as improving markets is a signal the national housing recovery is firmly under way, officials said.

"The real driver here has been house prices," said Robert Denk, a senior economist for the home builders group.

If you consider only two factors - growth in employment and single-family housing permits - nearly 300 metros have shown six or more months of gains.

"House prices are really moving up. All of the big national indicators show we've had a pretty good year so far in 2012," Denk said Friday by telephone from Washington, D.C.

The Stockton metro area - all of San Joaquin County - was among nine California metros that joined the improving index in December. There are now 14 Golden State communities on the list.

And the near-term outlook remains positive.

"In general, we expect the overall housing recovery to continue expanding in 2013," NAHB chief economist David Crowe said in a news release issued Thursday. "However, that is absent a major policy change of the kind that some policymakers have been discussing with regard to the mortgage interest deduction."

Denk said Crowe referred to discussions in Washington over averting the fiscal cliff - the expiration of George W. Bush-era tax cuts and deep cuts in federal spending on Dec. 31 - and longer-term federal deficit reduction.

"There is a lot of talk about reforming the tax code, and one of the ways they might do it is limit the mortgage interest deduction," he said.

"Fooling around with anything that affects housing at this point seems pretty foolish," Denk warned. "The gains of 2012 ... could be set back if people make some bad policies or decisions over the mortgage interest deduction."

Home builders group officials also said the main thing now limiting the housing expansion are tough qualifying standards mortgage lenders impose on would-be borrowers.

The Improving Market Index was created and first published in September 2011 to help home builders identify markets that were leading the country in housing recovery, Denk said.

"We put this together to emphasize that housing is local, local, local," he said. "What's going on in Stockton is not necessarily so well represented by the national numbers."

In that first month, only 12 U.S. metros met the criteria as an improving market.